Last month at Fourth Economy, we reviewed key lessons learned over the past year out of the COVID-19 pandemic. For me, no lesson has spoken louder than that of the critical nature of child care for our economy’s successful functioning. Indeed, I often feel like my head is spinning with the noise — every day, I am inundated with articles, webinars, and reports on how crucial this system is. But despite all of this information and investments at the local, state, and federal level; it is clear that the child system still hangs by a thread, with COVID-19 impacting child care providers, the labor force (especially women of color), and the business community at large.
Impacts on Child Care Supply & Providers
We know that even before COVID-19, there were gaps in needed child care. Since the beginning of the pandemic, child care capacity and need has had ups and downs, but has not returned to pre-pandemic levels. By September 2021, demand may finally return to pre-pandemic levels with a full reopening of our economy and mass vaccinations. But as child care providers suffer the long-term consequences of decreased demand, extended closures, and additional expenses brought on by new public health requirements, many businesses may have permanently closed and supply could suffer a long-term loss.
Impacts on the Labor Force & Women of Color
Estimates predict that anywhere from 12% to 18% of working parents have left the workforce during the pandemic due to child care issues, with women, single parents, and low-income parents more likely to cite child care as a reason they are unable to return to work. Almost 2.3 million women exited the labor force, nationally, between February 2020 and February 2021, vs. 1.9 million men (Source: BLS, Data Table A-1, figure seasonally adjusted, women 20 and over). And while women of color are more likely to have dropped out of the labor force this past year, they are also more likely to be the primary breadwinner of their household (68% of Black women are primary breadwinners vs. 37% of white women).
Impacts on the Economy and Businesses
On top of impacts to working families’ employment and income, businesses have been affected by lack of access to child care as well, with a 144% increase in child care-related work absences from Sep-Nov 2020 (compared to the same period in 2019). Businesses have much to gain from implementing family-friendly policies and supporting child care infrastructure: companies that offer child care assistance see employee absences decrease by up to 30% and turnover (costs of which are as high as 21% of a worker’s annual salary) decline by as much as 60% (Source: Bipartisan Policy Center & Public Private Strategies).
Opportunities for Action
Despite strong supports from the American Rescue Plan Act, our child care infrastructure needs increased, consistent public funding beyond temporary stabilization measures. If child care supply can be maintained during and after the COVID-19 pandemic, working parents will be able to reenter the workforce more quickly.
Additionally, the business community must become more involved in offering critical child care supports, which will benefit their employees, their businesses, and the economy at large. In the Pittsburgh region, we’ve worked with a group of “child care champions” to put together some more specific how-tos for businesses to do just that. We encourage you to check out our website and tell us what you think.
With continued focus, more action, and engagement from non-traditional stakeholders — like the business and economic development communities — we can build child care back better than ever before. But we can’t rest easy yet.
If you are interested in discussing this work and/or seeing our most recent analysis — reach out to us!